Clarification on the applicability of 3% amount on account of non-achievement of minimum Value Addition as mentioned in para 4.49 (b) and amount equivalent to 10% of the CIF value in Para 4.49 (a) (ii) of HBP 2023 - DGFT - Policy Circular No. 02/2024

Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Foreign Trade Vanijya Bhawan, New Delhi Policy - 4 Division Policy Circular No. 02/2024 Dated: 03rd May, 2024 To All Regional Authorities of DGFT All Exporters/Members of Trade All Custom Authorities Subject: Clarification on the applicability of 3% amount on account of non-achievement of minimum Value Addition as mentioned in para 4.49 (b) and amount equivalent to 10% of the CIF value in Para 4.49 (a) (ii) of HBP 2023 -reg. This Directorate is in receipt of some cases seeking relaxation in payment of 3% amount under Para 4.49 (b) and similar provisions of HBP 2023 against Advance Authorisation issued prior to 01.04.2023. 2. In this regard, attention is drawn towards Para 4.48 (a) of Handbook of Procedure 2023 (Transitional Arrangement for Authorisations issued up to 31.03.2023), which provides that, Advance Authorizations (AA) including Advance Authorizations for Annual Requirement issued up to 31.03.2023 shall be governed by the respective provisions contained in the relevant HBPs, under which the subject AA was issued, excepting provisions relating to clubbing and extension in Export Obligation period. 3. Accordingly, it is clarified that provisions relating to the payment of 10% of CIF value and 3% of shortfall in FOB value amounts specified in Para 4.49(a) (ii) and 4.49(b) respectively of Handbook of Procedures, 2023 are applicable only in cases where Advance Authorization is issued on or after 01.04.2023. 4. AAs issued prior to 01.04.2023, will be governed by the relevant provisions of HBP (for the purpose of regularisation of bonafide EO default) under which such AAs were issued. 5. However, this clarification will not constitute a ground for refund of fees already paid. 6. This Policy Circular is issued with the approval of the Competent Authority. (K.M. Harilal) Jt. Director General of Foreign Trade (Issued from file no. 01/94/180/128/AM24/PC-4)